Want to slash your bills, starting with your mortgage?

Here are 6 hacks that could help you pay less on your mortgage

09 September 2021|3 minute read

couple refinancing

Owning a home is a dream come true for most Aussies, but that dream can quickly become very costly and create financial stress. That’s why we’re here to reduce that financial burden by sharing 6 tips that could potentially assist you in having a debt-free lifestyle, and perhaps pay off your mortgage faster.

1. Consolidate your credit cards and other debt into your home loan.

Refinancing your home loan is a great way to start consolidating your debt into a single loan. The interest rate on a home loan is likely to be lower than the rate you'll pay on other types of debt.

Consolidating your debt into your home loan could mean a reduction in your overall monthly household bills.

However, it could also turn a short-term debt like a personal loan into a much longer-term debt (i.e. Your home loan). It’s always a good idea to crunch the numbers, by chatting to your broker, to know if consolidating debts into your home loan could save you money in the long run.

2. Get a cashback deal

Thinking about getting a home loan refinance deal? You might want to consider a product with a cashback incentive. Due to increasing competition between banks, some lenders may actually give you money to refinance your mortgage, with some offering up to as much as ‘$3,000’ to put towards your home loan. 

This may be paid through gift cards or in the form of cash when you settle a home loan. You can even choose to spend the money or use it towards your home loan.

3. Reduce living costs

There’s no time like the present to start saving. Setting up a goal is a great way to foster a positive mindset and pay off your home loan faster. Running your home like a business can also help you navigate your way onto the leader board of success.

So say goodbye to takeout and hello to homemade food, and if you're a big spender check out some common personalities plus tips to help you avoid danger zones. 

4. Offset Vs Redraw Facility

What is the benefit of an offset account?

An offset account is a savings or transaction account linked to your home loan. The balance of the offset account is deducted from your main loan ‘principal’ when the bank works out your interest.

An offset account may help reduce the amount of interest you pay on your home loan. For example, property owner Jenny had a “$1,000,000” home loan and $100,000 in an offset account; she will only be charged interest on a principal of $900,000. 

How does a redraw facility work?

A redraw facility allows you to withdraw any extra repayments you may have made on your home loan. Making extra repayments, when you can afford to do so, could help you reduce the total interest you pay on your mortgage and help you shave years off your home loan as a result.

5.Put your extra cash into your mortgage

First, consider your financial situation. Are you paying monthly? Can you afford to make extra repayments fortnightly? Any additional payments you put towards your mortgage can shave years off your home loan.

If you have recently received a bonus or have cut down on living expenses, even received a large tax return - this can help increase the equity in your property and reduce the amount of debt you owe.

Speak to your Aussie Broker today to find out how you may be able to reduce your loan amount faster than expected.

6. Lower your interest rate

The home loan market is always changing, and this can cause a significant impact on your mortgage interest rates. If you are unhappy with your current interest rate, there may be a way to get a better rate to help you reduce your loan repayments.

Having a great credit history with no late repayments can put you in a better financial position when negotiating with your bank.

Of course, you should also shop around with other lenders to ensure you’re getting the right interest rate across the term of your loan. Speaking to an Aussie broker can also alleviate some financial stress by checking your eligibility for loan options including low fees, low rates, or additional features depending on your circumstance.

Understanding the different rates available to you can be frustrating. The loan product you originally chose may not be right for you in your current financial situation.

That's why an Aussie broker is the right person to speak to when it comes to negotiating rates on your behalf. They understand the current market to guide you on the right path to success and potentially get a better interest rate for your circumstances.

Keep learning

How refinancing can help save you money

If your financial circumstances allow it, refinancing could save you money.
Read more

Thinking about a house deposit?

Know more about putting down a deposit on your dream home.
Read more